The head of a cryptocurrency exchange has criticised the The Commodity Futures Trading Commission (CFTC) over its latest regulatory move over virtual currencies.

The CFTC released a request for information (RFI) earlier this week, seeking feedback in order to better inform its understanding of the technology, mechanics and markets for virtual currencies beyond Bitcoin – namely Ether and its use on the Ethereum network.

The RFI also seeks to understand similarities and distinctions between Ether and Bitcoin, as well as Ether-specific opportunities, challenges and risks. It stated that the information received will benefit LabCFTC, the CFTC’s FinTech initiative, in forming future policy.

Gavin Smith, chief executive at Panxora, responded that while it’s a welcome move forward for the US to provide clarity, overseas regulators need to be more proactive, or risk losing control of this exciting new asset entirely in the US.

“US authorities are controlling the development of cryptocurrency globally by imposing draconian fines and sometimes criminal proceedings on companies – this can apply regardless of whether businesses are legally operating in their own jurisdictions,” he commented.

“This is worrying for companies operating outside of the US, as you could create a business that is perfectly legal in your own jurisdiction, but still risks prosecution by the US Federal Government,” Smith continued. “Until sovereign governments take a stand to protect businesses operating within their borders, the US is being handed unchecked power in controlling the development of the crypto-economy.”

In September, a group of cryptocurrency startups and investors formed the Blockchain Association, a lobbying group to amplify their influence in US politics.

This followed a mixed response from different US regulators during 2018. In May, the Securities and Exchange Commission (SEC) set up a mock Initial Coin Offering (ICO) website to help educate potential investors about the risks inherent in such opportunities. This came after a speech from SEC commissioner Hester M. Peirce, where she sounded a note of caution around cryptocurrencies and the regulator’s role in policing the market.

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